Whether you need to hire a new employee or initiate a new project, obtaining executive approval is easier when you remember to keep it S.I.M.P.L.E. Showing a return on investment can be a comparison of a person’s salary compared to Cost of Turnover (COT), Cost of Vacancy (COV), loss of customers, loss of sales, loss of productivity, etc. Be realistic with your benefit statements. The goal is to make it clear that the problem or missed opportunity is costing more than the solution.
State the Opportunity
The company is on track to increase sales by 20%.
Identify the Challenge
Traditionally, when sales increase it is because customer orders go up. We need the right number of Customer Service Representatives (CSRs) to meet estimated customer sales demand.
Make it Measurable
We’ve found we need one trained CSR for every 100,000 units sold each month. A 20% sales increase equates to a staff deficiency of one CSR.
Present the Solution
Based on sales projections, we will see the 20% increase realized in two months. It takes 1.5 months to ramp up a fully productive CSR. We need to hire now.
List the Benefits
A 20% increase in sales and maintaining productivity is an $114,000 annual opportunity (or $9,500/month).
Equate It to Return on Investment (ROI)
Two month’s salary for a CSR making $30,000 annually is $5,000. Compared to the $19,000 we will make through a 20% increase in sales for 2 months, we make $14,000 ($19,000-$5,000) by hiring faster.